Central banks’ digital bid to shape global trade

A shipment can be tracked from a factory floor to a warehouse with a few clicks on a phone. The money that pays for it often cannot. 

Cross-border transfers still ricochet through correspondent banks, pick up fees along the way, and arrive days later. This mismatch - 21st-century logistics paired with 20th-century money - is one reason central banks are now pushing an idea that once sounded like science fiction: central bank digital currencies, or CBDCs.

According to the Atlantic Council’s CBDC Tracker, more than 130 countries, representing about 98% of global GDP, are exploring digital versions of sovereign cash. 

The pitch is efficiency: faster payments, fewer intermediaries, lower costs. The subtext is control. As private stablecoins and platform wallets expand, governments want a form of digital money that sits inside their legal and regulatory perimeter. 

Thus, CBDCs are forcing a more basic argument about the nature of money in a digital age. Central bank officials frame the project as monetary sovereignty: a public option for digital payments in a market dominated by private networks and dollar-backed stablecoins. Commercial banks see a threat as well as an upgrade.

If consumers can hold risk-free central bank money directly, commercial banks worry about ‘disintermediation’. Given the choice between a commercial bank deposit (which carries some risk, however minimal) and a risk-free CBDC, a large number of consumers and businesses, especially during times of financial stress, might choose to move their funds to the central bank's digital ledger.

And, as consumer deposits are the primary source of funds for commercial bank lending (or financing), a significant drain in these deposits would force banks to find alternative, potentially more expensive, sources of funding or drastically reduce the amount of credit they can extend to individuals and businesses, impacting economic growth. That is why policymakers have floated holding limits and distribution models that keep banks and regulated payment firms as the front door. 

Progress, for now, is patchy. Only a small number of CBDCs are fully live, as per the Atlantic Council, including the Bahamas’ Sand Dollar, Jamaica’s JAM-DEX and Nigeria’s eNaira. China has gone further than anyone else. By mid-2024, its e-CNY - the digital yuan - had processed roughly 7 trillion yuan in transactions, giving Beijing the world’s biggest laboratory for state-issued digital money.

More politics, less policy
The race looks different by region, and politics often matters more than code.

In the United States, a 2025 executive order sought to bar a retail CBDC, reflecting a political fear that digital cash could become a surveillance tool. Canada has consulted the public about a “digital loonie” but says it will not proceed without a clear need and enabling legislation. Yet even in a cautious region, central banks are experimenting where the politics are quieter. 

The Federal Reserve Bank of New York’s Project Cedar, in 2022, simulated a wholesale CBDC that could settle a foreign-exchange trade in under 15 seconds, with the two legs completing at the same moment. It was not a consumer wallet, but it was a glimpse of how trade and treasury payments might one day clear with far less friction. 

Europe is moving slowly and deliberately. The European Central Bank has entered a preparation phase for a digital euro, indicating that a pilot could begin in 2027 and that any broad launch would likely come no earlier than 2029. 

For emerging markets, CBDCs are often sold as a leapfrog: a way to reach people who have phones but no bank accounts, reduce the costs of cash, and distribute benefits more efficiently.

Though, this has faced a reality check. Nigeria’s eNaira is an example. The IMF reported fewer than a million eNaira wallets early on, under 1% of active bank accounts and estimated that 98.5% of wallets were unused in any given week. India’s pilot has been broader and more patient. The Reserve Bank of India has expanded trials across banks and merchants, and by March 2025 about 10.2 billion rupees of e-rupee was reported in circulation.

In the Islamic world, CBDCs are being discussed as tools for both competitiveness and compliance. Saudi Arabia and the UAE tested a wholesale CBDC in Project Aber; the UAE aims to launch a retail “digital dirham” by 2026 and has trialled cross-border transfers via mBridge. 

Iran, Pakistan, and Türkiye also had taken steps to explore CBDCs. That matters for the fast-growing halal economy, where certification and traceability are commercial requirements. Programmable payments could, in principle, release funds only once halal certification is confirmed and goods are delivered.

The Rub
Islamic finance adds constraints: a Shariah-aligned CBDC must avoid interest (riba) and speculative structures. Most proposals are non-interest-bearing, resembling digital cash. The harder question is governance: if rules are coded into money, who writes them, and what safeguards protect privacy and due process?

For compliance teams, CBDCs can look like the future arriving early. Identity checks, transaction limits and sanctions screening can be embedded into wallets and payment rails, producing an audit trail that cash cannot provide. That could make money laundering harder, improve tax collection and reduce fraud in trade payments. 

But the same architecture fuels public anxiety. If money becomes deeply traceable, citizens worry that routine spending will be monitored, or that payments could be blocked or frozen in ways cash cannot. Central banks promise guardrails: tiered wallets, privacy-preserving designs for small payments, and legal limits on how data can be used. In an era of polarised politics, those guardrails may matter as much as the technology.

Then there is the engineering problem that sounds boring until it breaks: interoperability. A world where each CBDC is a national silo could make cross-border trade more complex, not less. International bodies are pushing models for safe exchange among digital currencies, but agreements will require diplomacy as much as software, particularly where sanctions, data localisation and differing privacy norms collide. 

Cybersecurity adds another layer: a CBDC platform would be an irresistible target for criminals and hostile states, and a single high-profile breach would be a crisis of confidence, not just a technical failure.

CBDCs are often described as the next chapter in money. They are also a referendum on trust.

If central banks can deliver a form of digital cash that makes trade faster, meets compliance demands and does not feel like surveillance, CBDCs could become the quiet infrastructure of global commerce. 

If they cannot, the space will be filled by private alternatives that are already racing ahead - and the public sector may find it has ceded the future of money by trying to control it too tightly.